Hobart prices slide tip

GET YOUR REAL ESTATE GUIDE LIFTOUT

HOBART’S property market is among four capital cities forecast to suffer a fall in home prices this year.

And the report foreshadows an even larger reduction by Christmas next year.

However, a local expert is not convinced the market will slow to that level.

The new Property Market Outlook by PropTrack director of economic research, Cameron Kusher, predicts a -1 per cent to -4 per cent change in

Hobart sale prices by the end of this year, followed by -7 per cent to -10 per cent by the end of next year. At the extreme end of the forecast, a 14 per cent reduction from Hobart’s June median dwelling value, $735,936, would take $103,031 from the median.

At about $632,900, that would be a similar median value to July-August 2021.

In the report, Mr Kusher noted that greater Hobart prices had increased 50.1 per cent since the start of the pandemic, meaning prices would have to fall “significantly” to return to pre-Covid levels.

“Although price growth was slowing pre-rate hikes, the Reserve Bank’s moves have further slowed price growth resulting in some falls in recent months,” Mr Kusher said.

“For people looking to purchase, the urgency to buy has eased significantly.”

Petrusma Property director Daniel ten Broeke said a reduction in the 1-4 per cent range sounded possible, but he did not see such a large price reduction coming for next year.

“Tanking -10 per cent next year? I would not accept that, that would be severe,” he said.

“There is far too much demand for that to happen.

“Buyers are being cautious, but demand remains solid and turnover has not dropped over the past six months. The big change has been that those offers of $50,000-$100,000 over asking price are gone and we are seeing more subject-to-sale contracts now than we have in the past few years.”

The report showed Hobart prices were at their peak in June, up 17.4 per cent year-onyear but with growth now slowing from the frenzied pace of early last year.

New for sale listings in June were 44.4 per cent higher than the historic lows of one year prior. While properties are selling at a slower pace than they did last year, Hobart remained the second-fastest city market with an average time on market of 26 days.

Mr Kusher said the cash rate was now expected to be in the 2.5-3 per cent range by the end of the year.

“Higher interest rates could bring more stock to the market and reduce the number of competing buyers,” he said.